Javier Milei, the president of Argentina, became the most recent politician to endorse a memecoin.
Milei, a brash-talking populist, followed in the footsteps of President Donald Trump, who launched his own cryptocurrency before his presidential inauguration in January.
On Friday night, Milei touted his cryptocurrency, LIBRA, to his almost 4 million followers on X in since-deleted posts. “Long live liberty, damn it!” he said, invoking his trademark exclamation as he linked to a website where users could buy the memecoin.
LIBRA’s value soon jumped to a total market capitalization of more than $4.5 billion on the back of the president’s endorsement, according to Dexscreener. Just hours later, its price crashed after early buyers cashed out large portions of their holdings, according to analysis from Bubblemaps, a crypto analytics firm.
“There are a lot of hallmarks of manipulative trading practices,” Scott Armstrong, a former prosecutor who handled crypto cases for the Department of Justice, told Fortune. “These kinds of manipulative trading practices have caught the attention of law enforcement in the past.”
The token is now worth around $300 million, and crypto traders, as well as Argentine politicians, are calling foul. An Argentine judge has even opened a probe into Milei after lawyers alleged that he had engaged in a pump-and-dump scheme—when a cryptocurrency founder hypes up a token only to quickly sell large quantities of it.
What are memecoins?
Memecoins are cryptocurrencies that have no underlying function. Bitcoin, the world’s largest cryptocurrency, was designed to be a digital rival to the dollar. Ether, the world’s second-largest cryptocurrency, facilitates so-called decentralized applications like lending products and digital artwork.
In contrast, Dogecoin, the largest memecoin by market capitalization, was launched as a joke. In 2013, two developers made the token to riff off Doge, a popular online meme that features a Shiba Inu, a Japanese dog breed.
Since then, memecoins have flooded crypto. Celebrities like Caitlyn Jenner have launched their own tokens, whose prices are propelled by the cryptocurrencies’ associations with recognizable names. And Melania Trump, the first lady, also launched her own memecoin, MELANIA, the same week as her husband.
Most tokens—including both Trump tokens—tend to crash in price after early holders sell to eager investors buying up the cryptocurrencies on the launch hype.
What is Milei’s memecoin?
Late Friday night, Milei wrote in a since-deleted post that the LIBRA token, launched the same day, was designed to raise money for small and midsize businesses. “The world wants to invest in Argentina,” he wrote, according to a screenshot of the post. He then directed his followers to go to a website to buy the token, whose name roughly translates to the “Long Live Liberty Project,” which is “driving the future of freedom and growth,” according to the website.
About 20 minutes before Milei’s post, insiders readied themselves to sell the token, according to TRM Labs, a crypto analytics firm. Then, after Milei endorsed the memecoin, the insiders gradually cashed out their position into Solana, another less volatile cryptocurrency.
“It is a pretty huge scandal within crypto,” Nicolas Vaiman, the CEO and cofounder of the crypto analytics firm Bubblemaps, said in an interview. “Everybody’s trying to find who’s responsible.”
Who helped Milei?
There’s a tangled web of finger-pointing about who was and wasn’t part of LIBRA’s launch.
Milei’s representatives said in a lengthy post on X that KIP Protocol, which builds AI and crypto infrastructure, was behind the memecoin. KIP Protocol said it wasn’t behind the token’s launch in a post on X, and instead pointed to Kelsier Ventures, a crypto family office run out of Dubai.
“We were not the instigator, we did not touch any funds and we have not profited,” a spokesperson for KIP Protocol said in a statement to Fortune.
Hayden Davis, the CEO of Kelsier Ventures, then admitted to being behind the token launch on X. “I am indeed Javier Milei’s advisor,” he said. However, he said he was “only a part of what happened to LIBRA” and that “a lot of people that have been involved with this launch have gone silent or are nowhere to be found.”
Davis then said in an interview with Stephen Findeisen, a popular YouTuber who goes by Coffeezilla, that Mauricio Novelli and Manuel Godoy, founders of an Argentinian tech conference, were also involved. Davis also admitted to cashing out $100 million shortly after the memecoin’s launch.
“We were brought in at a very late stage by Novelli,” added the KIP Protocol spokesperson on the company’s involvement. “Our understanding was that we were supporting a project that would benefit Argentinian businesses.”
Milei’s representatives, Kelsier Ventures, Novelli, and Godoy did not immediately respond to a request for comment.
What are the consequences?
Milei’s memecoin saga has dominated headlines in Argentina.
On Monday, Argentina’s stock market plummeted, as its main stock index dropped 5.6% when markets opened. Milei has since tried to distance himself from the memecoin’s launch in subsequent statements.
His representatives said in the X post that Milei wasn’t involved in the cryptocurrency’s development and he had only endorsed it. They added that after he saw the token’s price collapse, he decided to delete his posts. “I have nothing to hide,” Milei said in an interview on an Argentine talk show on Monday.
Still, after lawyers in Argentina, led by Milei political opponent Claudio Lozano, filed more than 100 fraud complaints against the president, an Argentine judge opened up an investigation into the allegations against the president, according to the Associated Press. Some political opponents even called for his impeachment.
Milei, though, said on the talk show he acted “in good faith.”
Update, Feb. 19, 2025: This article has been updated with a comment from KIP Protocol.
